Policy in Different Industries for WOFE

"Provisions on Guiding Foreign Investment" (Revised in 2004) embodied the Chinese government's industrial policy for foreign investment. Foreign invested projects are divided into encouraged, permitted, restricted and prohibited, four(4) categories. Foreign investment projects of “encouraged”, “restricted” and “prohibited” categories are included in the categories of the Guidance of Foreign Investment Industries. For those involved belong to encourage, restrict and prohibit, are exceptional to allowed foreign investment projects. Those not included in the "Catalogue for the Guidance of Foreign Investment Industries" projects are allowed foreign investment projects.

(1) According to the "Provisions on Guiding Foreign Investment", should it belongs to anyone of the following circumstances is the encouraged foreign investment project :-

 High-tech, advanced and applicable technologies that can improve product performance, improve technical and economic benefits of domestic raw or production insufficient production capacity of new equipment, new materials ;

 To meet market demand by improving product quality, developing new markets or increasing the international competitiveness ;

 New technology and new equipment, it can save energy and raw materials, utilization of resources and renewable resources, and environmental pollution prevention and control of ;

 To fully utilize the manpower and resources in the Midwest, and in line with national industrial policy ;

 Other cases laws and administrative regulations.

(2) Should it belongs to any one of the following circumstances, they are limited foreign investment projects :-

● Technology lagged behind;
● It is not conducive to saving resources and improving the ecological environment;
● It is engaged in state-specific protective mining mineral exploration, mining;
● It belongs to the state of the gradual opening up of the industry;
● Other cases as defined or stated in laws and administrative regulations.

(3) Should it belongs to anyone of the following circumstances, they are prohibited foreign investment projects:-

● Endanger national security or harm the public interest;
● Damage to the environment caused by pollution, destruction of natural resources or harm to human health;
● Take up a lot of arable land that is not conducive to the protection and development of land resources;
● Endanger the safety and performance of military facilities in;
● Use of particular techniques or technology to produce products;
● Other cases as defined or stated in laws and administrative regulations.

(4) Other items outside of the above three projects are allowed foreign investment projects.

(5) All products exported are allowed foreign direct investment projects and is deemed to be the encouraged foreign investment projects; export sales for more than 70% of its total sales are restricted foreign investment projects, the provinces, autonomous regions, municipalities and cities people's government or the approval of the competent department of the State Council can be regarded as permitted foreign investment projects.

(6) For the Midwest, it can really play the advantages of permitted and restricted foreign investment projects, the condition can be relaxed. For those included in "Midwest Industrial Catalogue for Foreign Investment", they can enjoy the preferential foreign investment projects as encouraged political Policy.